£7 billion increase in annual funding can only be a starting point for Social Care reform

Friday, October 23, 2020

The Health & Social Care Committee has just concluded their Social Care: Funding and Workforce inquiry and believe that a £7 billion increase in annual funding can only be a starting point for the social care reform. After looking into the issues around current funding problems, the social care workforce and proposals on how to reform the funding of social care, they concluded that there should be a lifetime cap on social care costs and that free personal care should be considered.

Current Social Care Funding Problems

The cross party Health and Social Care Committee looked into the current funding problems and found that over 20% of care workers are only paid the National Living Wage of £8.72 per hour, with 1 in 5 care workers under the age of 25 paid less than this. The proportion of care workers paid on or above the Real Living Wage of £9.30 per hour has decreased significantly over the last 7 years from 25% in September 2012 to just over 10% in March 2019.

Councils are facing mounting funding pressures and there are 13 councils paying less than £15 per hour for care which doesn’t cover the national living wage and statutory employment on-costs. As a result more and more companies providing care are going out of business or being forced to cancel their contracts with councils.

The committee is calling for a significant funding increase. They are aware that they are calling for this at a time when public finances are stretched however the COVID-19 pandemic has made it clear that doing nothing is no longer an option. In order to meet demographic changes and planned increases to the National Living Wage, there must be an increase in annual funding of £3.9 billion by 2023–24. The committee are aware that this increase in annual funding will not be enough to improve care or to allow more people to access care so they are recommending to the Government that they raise the annual adult social care budget by £7 billion by 2024-25 as the starting point for a wider series of reforms.

Social Care Workforce

When the committee looked into the Social Care Workforce they found that 1.49 million people in England work in social care jobs across 18,500 organisations. The social care sector is under significant pressure, with 122,000 jobs unfilled, a turnover rate of 30.8%, and a quarter of staff employed on zero hours contracts.

The challenges faced by social care staff during the pandemic were made worse by problems in providing them with enough personal protective equipment (PPE), as well as problems accessing regular coronavirus testing. Social Care workers feel under recognised and their pay is comparative to the retails sector which is less skilled and where there is less responsibility.

The committee is calling on the Government to ensure under the next spending review that sustainable funding provides competitive pay for social care workers and that the pay is comparable with NHS staff. The committee is concerned about the impact of the Government’s Immigration Bill, given that 17% of social care workers come from outside of the UK so are calling on the Government to ensure social care workers can continue to be recruited from overseas for as long as it takes to make sure there are enough social care workers trained and working from the UK and they are urging the government to accept the Migration Advisory Committee’s recent recommendation to add senior social care workers to the shortage occupation list.

Proposals to reform the funding of social care

During their inquiry, the Health & Social Care committee found that the system perpetuates a profound unfairness as a result of some conditions being ineligible for social care. If people have dementia or motor neurone disease, they get no free care. If they have cancer, they get free care. Many people end up having to pay large amounts of their own money for social care. The Alzheimer’s Society state that the total cost of care for people living with dementia is typically £100,000, but that cost can rise to as much as £500,000. Two-thirds of this cost is currently being paid by people with dementia and their families.

The Committee believe that there are two options for reform

Free personal care: as recommended by the 2019 Lord’s Economic Affairs Committee’s report on social care funding and our predecessor Committee who published jointly with the Housing, Communities and Local Government Committee a report on adult social care funding in 2018. The cost estimated in the Lord's report would be £5 billion per year.


A life-time cap on care cost: as recommended by the Sir Andrew Dilnot’s review. Under this policy a person with savings and assets would be expected to make a contribution, but only up to a certain maximum, after which the state would fund care. The comittee calls for the cap to be set at £46,000; the level specified in Sir Andrew Dilnot's original report, which will cost around £3.1 billion by 2023/24.